Why the Nation Lost Its Appetite for Pizza Hut
Once, the popular pizza chain was the favorite for families and friends to feast on its all-you-can-eat buffet, unlimited salad bar, and self-serve ice-cream.
But fewer patrons are choosing the chain these days, and it is closing half of its UK outlets after being acquired following financial trouble for the second occasion this year.
It was common to visit Pizza Hut when I was a child,” says one London shopper. “It was a regular outing, you'd go on a Sunday – spend the whole day there.” However, at present, as a young adult, she states “it's fallen out of favor.”
According to a diner in her twenties, some of the very things Pizza Hut has been known and loved for since it opened in the UK in the seventies are now less appealing.
“How they do their all-you-can-eat and their salad bar, it feels like they are cheapening on their quality and have inferior offerings... They're giving away so much food and you're like ‘How is that possible?’”
Because food prices have soared, Pizza Hut's buffet-style service has become very expensive to run. The same goes for its restaurants, which are being reduced from 132 to just over 60.
The chain, in common with competitors, has also seen its operating costs go up. Earlier this year, staffing costs jumped due to higher minimum pay and an higher rate of employer taxes.
Two diners say they frequently dined at Pizza Hut for a date “occasionally”, but now they get delivery from a rival chain and think Pizza Hut is “too expensive”.
According to your order, Pizza Hut and Domino's prices are similar, notes a food expert.
While Pizza Hut does offer pickup and delivery through external services, it is falling behind to major competitors which solely cater to off-premise dining.
“Domino's has managed to dominate the delivery market thanks to strong promotions and ongoing discounts that make shoppers feel like they're saving money, when in reality the standard rates are on the higher side,” says the expert.
But for the couple it is justified to get their date night brought to their home.
“We definitely eat at home now more than we eat out,” explains one of the diners, reflecting latest data that show a drop in people going to informal dining spots.
Over the summer, informal dining venues saw a 6% drop in patrons compared to last summer.
Additionally, one more competitor to ordered-in pies: the cook-at-home oven pizza.
A hospitality expert, senior partner at a leading firm, explains that not only have grocery stores been selling premium prepared pies for a long time – some are even selling pizza-making appliances.
“Lifestyle changes are also having an impact in the performance of quick-service brands,” states the expert.
The increased interest of low-carb regimens has increased sales at poultry outlets, while affecting sales of carb-heavy pizza, he adds.
Because people go out to eat less frequently, they may prefer a more high-quality meal, and Pizza Hut's American-diner style with vinyl benches and traditional décor can feel more old-fashioned than luxurious.
The “explosion of artisanal pizza places” over the last decade and a half, including new entrants, has “fundamentally changed the public's perception of what quality pizza is,” says the industry commentator.
“A crisp, airy, digestible pizza with a few choice toppings, not the overly oily, dense and piled-high pizzas of the past. This, in my view, is what's led to Pizza Hut's struggles,” she comments.
“Why would anyone spend a high price on a tiny, mediocre, unsatisfying pizza from a franchise when you can get a stunning, expertly crafted Margherita for less than ten pounds at one of the many real Italian restaurants around the country?
“It's a no-brainer.”
A mobile pizza vendor, who operates Smokey Deez based in Suffolk says: “The issue isn’t that stopped liking pizza – they just want better pizza for their money.”
The owner says his flexible operation can offer premium pizza at accessible prices, and that Pizza Hut had difficulty because it could not keep up with evolving tastes.
From the perspective of Pizzarova in a city in southwest England, owner Jack Lander says the sector is diversifying but Pizza Hut has not provided anything new.
“Currently available are slice concepts, London pizza, new haven, artisan base, traditional Italian, Detroit – it's a wonderful array for a pizza-loving consumer to explore.”
He says Pizza Hut “should transform” as younger people don't have any fond memories or attachment to the chain.
Gradually, Pizza Hut's market has been divided and distributed to its fresher, faster alternatives. To maintain its expensive staffing and restaurants, it would have to raise prices – which experts say is tough at a time when household budgets are tightening.
The managing director of Pizza Hut's overseas branches said the buyout aimed “to protect our dining experience and retain staff where possible”.
It was explained its key goal was to maintain service at the remaining 64 restaurants and off-premise points and to help employees through the change.
However with so much money going into maintaining its outlets, it probably cannot to invest too much in its off-premise division because the industry is “difficult and working with existing external services comes at a price”, analysts say.
Still, experts suggest, reducing expenses by leaving oversaturated towns and city centres could be a smart move to adapt.